Should allowance be tied to chores?

Last week, I sought your help in developing an allowance system for my kids. The feedback I got was great. I’m inspired to see so many parents who have such great ideas when it comes to creativity with allowance systems. As I continue to develop an allowance system for my kids, I have read a lot about the pros and cons of basing the allowance on a set of chores.

Anti-chores based allowance

Those that are against chore based allowance systems argue that chores are part of family responsibilities while allowances are part of a child’s learning experience with respect to spending and saving. They believe these issues should be separated.

Some have argued that parents don’t get paid for their basic duties and responsibilities in maintaining the house like cooking and cleaning so why should we teach kids there is compensation for things they should do as part of their role in the family unit.

Some critics argue that a chores based system does not work for all kids. What if your child does not need money? Does that mean they do not have to do their list of duties? Shouldn’t they be done regardless of pay?

Tie it together

On the other side of the debate, some parents do not want the allowance to be a handout. When the kids grow up, they will quickly realized that hard work does pay off and that compensation is tied to effort, time and value. If that’s true and a hard reality then learning it early is not a bad lesson to take up.

I sometimes wonder if this new era of entitlement has something to do with parents spoiling kids and not making kids work for their allowance. Does it have something to do with allowance programs that do not require chores or actions? If parents buy their kids anything and everything, what does that teach them about working for money?

An allowance creates valuable teaching opportunity. It can be a tool to teach kids about the value of money. It should teach kids that money does not grow on trees and that you can’t get money without doing something to deserve it.

A little bit of both

I can see both sides of the argument but I must admit, I think there is nothing wrong with tying the allowance to chores. As an entrepreneur, I want to teach my kids about the importance of work ethic. I believe hard work pays off and tying benefits to performance is a valuable life lesson. It's so important to me that the allowance program teaches my kids about money.

As I develop this allowance-based system, I know that I want to incorporate both elements into the program. To do this, I need to talk to my wife about which chores in the house will not be tied to compensation and other chores that will be tied to compensation and try to figure out how to incorporate this into a simple program my young kids will understand.

Got any thoughts on the pros and cons of tying allowance to chores?

My next post, I will share with you our next step in developing the program: defining the values. I'm getting closer to figuring this out.

Written by Jim Yih

Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace.
For more information you can follow him on Twitter @JimYih or visit his other websites JimYih.com and Clearpoint Benefit Solutions.

7 Responses to Should allowance be tied to chores?

We’re in the middle of this right now, and we’re trying to go with a little bit of both.

There’s a minimum allowance each week that requires a minimum level of chores, but they’re very basic, like dinner time chores, emptying the trash, etc.

Then there are higher effort chores, like mowing the lawn or doing the laundry that we pay extra for, as a way to incentivize the chores as well as giving the kids a chance to earn more money.

The challenge will come when our oldest finds a part time job (he’s looking), and how we’ll handle the allowance/chores balance.

This is just my bigger picture input here, but raising kids is more of a dynamic than a system. They’re growing and changing as the years pass, and we have to be ready to adjust with it. What works at one stage may not work at another.

Thanks for sharing Kevin. I totally agree with your last point “raising kids is more of a dynamic than a system. They’re growing and changing as the years pass, and we have to be ready to adjust with it. What works at one stage may not work at another.”

I find that another challenge is different kids are motivated differently and it’s hard to implement one system that works for all of my kids. I wonder if the right thing to do is implement different allowance programs for each of my kids . . . for example, one of my kids is just a natural saver unlike the other two who are natural spenders.
Cheers!

LOL! Greed is definitely a motivator. My 3 year old Connor wanted this lego set so bad, he potty trained himself to get it! I only wish all my kids were that greedy (I mean motivated!). thanks for sharing Mike!

I think it’s a little of both. Honestly, I see nothing wrong with allowance being tied to chores. It’s teaching the kids the value of money. They will learn at an early age that for them to earn money and buy the things that they want, they have to work hard for it.

I’d have to second Mike’s comment. Certain chores are mandatory. The things you have to do because of family responsibility. The things you are going to have to do for the rest of your life and you’re never going to get paid for them. Empty the dishwasher and reload. Do your laundry. Help clean house. Help Dad empty all the garbage cans in the house the night before garbage day. If the kitchen garbage can is full, take it out and put a new bag in. etc etc etc.

Then there are other things that are optional, for pay. These are not set. They are usually taking advantage of a situation that arises. Our friends down the street lawnmower crapped out. I’ll pay you to take our (manual) mower over any cut their lawn. That kind of thing.

Or the kid(s) ask for money for something and you think of something you can get them to do and pay them for it.

There were things that were expected of me around the house, but it wasn’t tied to allowance. The focus of the allowance was on saving and budgeting.

When I was very young, I was expected to save 1/2 my allowance. I was allowed to spend the other half. I usually bought candy.

As I got older, the allowance increased and I was still expected to save some. It wasn’t dictated how much to save as I got older, but the expectations of what the allowance should cover expanded. The allowance needed to go further than candy purchases; it would cover movie outings with friends, makeup, some of my clothes, gifts. I would save my money to buy Christmas gifts and the latest jeans, but I still had savings remaining in my bank account that continued to grow.

My allowance was never expected to cover the “needs”. I always had enough clothes and my school trips were funded by my parents.

I also had opportunities to make more money around the house. I seized these opportunities, not necessarily because I wanted to buy something, but because I wanted to increase my savings. The extra chores would be cutting the grass or the hedge, and cleaning in the house.

To this day, I still save. I’m still careful with spending. I raised my two daughters with the same approach to allowance and they are both good savers and budget their money well.

(BTW, I also had rapid success with potty training my daughter with Smarties as a bribe, and my other daughter quickly learned the multiplication tables to get a pair of tear-away pants.)